Sooner or later, every growing company asks the same question: should we hire an IT person, or pay a managed service provider? Most answers come down to vibes, not numbers. One camp says a hire is expensive and covers one person's availability. The other says a service is a recurring bill without a face. This article is the math, so the decision is yours and not the salesperson's.
01 The hire
What a full-time IT hire really costs
Start with the salary. US Bureau of Labor figures put the median pay for a network and computer systems administrator around $99,000 a year, and recent salary surveys agree, averaging in the $93,000 to $111,000 band depending on the source and seniority. That is the number on the offer letter, not the real cost.
The real cost is higher. Benefits, payroll taxes, insurance, and the rest typically add roughly a third on top: BLS employer-compensation data shows benefits make up about 30 percent of total compensation across the economy. That puts a systems administrator at roughly $130,000 to $140,000 a year in total cost in the United States. To that you can add recruiting, onboarding, and the months a new hire takes to actually know your environment.
And that buys you one person. One person cannot be on call around the clock, cannot take leave without coverage, and has a single set of skills. If that person is your whole IT department and they are out sick on the day a server fails, you have no IT department.
02 The service
What managed IT costs instead
Managed IT is billed per user or per device, and published pricing guides from managed service providers and industry sources put the typical range between $150 and $200 per user per month for full coverage, with basic plans under that and premium plans above. The type of service is what moves the number: monitoring-only at the bottom, then adding help desk, maintenance, and security as the price climbs.
So the arithmetic at 30 users: $150 to $200 per user per month means $4,500 to $6,000 a month, or $54,000 to $72,000 a year. Against a fully loaded hire between $130,000 and $140,000, one hire covers roughly two to three years of managed service for that size of company. It is not a precise figure, and it shifts with headcount, but the magnitude is honest: a full-time hire costs more than a year of managed IT, and not by a little.
03 The difference
What each one actually buys
The comparison is not only money. The two options deliver different things, and that difference is part of the decision.
- The hire is a person. Someone in the office who knows your business, sits in meetings, and builds relationships. That is real value, and it is the reason the hire often wins on culture even when it loses on math.
- The service is coverage. A managed provider runs monitoring around the clock, has a help desk with more than one person at the other end, and keeps going while anyone on your side is on leave. No single employee can match that coverage.
- The hire has a ceiling. One person has one skillset and one life. When a problem exceeds that person's depth, you are back to outsourcing the hard part anyway, usually at hourly rates.
- The service has a floor. If your IT only needs a few hours a week, managed IT at 50 or 200 dollars per user per month can feel like paying for a lot you do not use.
04 The turning point
Where the math flips
There is a crossover size, and it is roughly where the recurring cost of a service catches up with the fixed cost of a person. At 30 users the service wins on cost by a wide margin. At 60 users, managed IT at the upper end reaches about $144,000 a year, which is where a full-time hire starts to look like the more economical option, provided one person can do the whole job.
But the crossover is not just headcount. It depends on what the company needs. A company with a heavy, bespoke stack, an ERP, custom integrations, industry-specific software, will spend more of its IT budget on work that a generalist provider does not deeply know, and the in-house hire pulls ahead earlier. A company running mostly standard SaaS and Microsoft 365 is closer to the per-user model, and the service stays cheaper for longer. The honest way to find your crossover is to scope: get a fixed monthly price for your environment, then compare it to the fully loaded cost of the hire you would actually make.
05 The middle path
The option most companies end up with
The split is not actually binary, and the most common outcome we see is not either/or. Most of our clients keep an internal person or team and outsource the parts that defeat one person: 24/7 monitoring, after-hours help desk, the security work that requires continuous attention. The provider carries the routine load, the internal team owns the projects and the business relationships.
That mix is usually the honest answer. It gives the company the person it wants in the room, and the coverage and depth one person cannot provide alone. It also means the internal hire is not drowning in alerts and has time to do the work that justified the role in the first place. If you want to see how a managed layer under your own team works in practice, that is exactly what we run on the managed IT page, and we scope it after a free review rather than quoting a rate upfront.
06 The constant
Whatever you choose, give it an owner
Here is the part that has nothing to do with the budget. Whether the work is done by a hire or a provider, somebody has to own it: the responsible party for patches, backups, access reviews, and the annual security basics. Without an owner, IT becomes whoever shouts loudest when something breaks, and that is the most expensive setup of all, because it only gets attention at the moment of failure.
So decide on the model, but before you sign anything, decide who the accountable person is. If the answer is quickly and naturally given, you are in good shape either way. If it is a pause, that gap is worth fixing before the budget question.
